SAN JOSE, Calif. - Microsemi Corp. has entered into the FPGA market.
The analog and mixed-signal chip maker has entered into a definitive agreement to acquire Actel Corp. for $20.88 per share through a cash tender offer. The total transaction value is approximately $430 million, net of Actel's projected cash balance at closing.
Based in Mountain View, Calif., Actel is a supplier of field programmable gate arrays (FPGAs). Actel competes against Altera, Lattice, SiliconBlue and Xilinx. Now, Microsemi will compete in the tough FPGA fray.
Observers were scratching their heads about the deal. It was a complete surprise. Analog and FPGAs are completely different markets.
"We believe the addition of Actel will deliver compelling synergies to Microsemi," said James J. Peterson, Microsemi's president and chief executive, in a statement.
"Actel will bring the most widely-used mixed-signal, radiation tolerant FPGA products in the aerospace and defense markets today, and the company's products will allow Microsemi to extend its growing system-level capabilities,'' he said. ''As Microsemi continues to move up the value chain in offering its customers system solutions that are better, faster, and more-cost effective than they can build themselves, Actel's highly-integrated solutions will be an integral component in enabling this growth."
Microsemi expects significant synergies from this immediately accretive transaction. Based on current assumptions, Microsemi expects the acquisition to be $0.22 to $0.28 accretive in its first full calendar year ending December 2011.
For the September quarter, net sales for Microsemi are expected to range from $146 to $150 million. As of this date, Microsemi remains comfortable with its previously announced non-GAAP diluted earnings per share guidance for its fourth fiscal quarter 2010 of $0.33 to $0.35.
No approval of the shareholders of Microsemi is required in connection with the proposed transaction. Terms of the agreement were unanimously approved by the boards of directors of both Microsemi and Actel.
Very much true, but only part of the story.
Actel has a sad execution history that pegged it at 200M$ or there abouts. The only way out was to be bought and have some real edgy management put in. The Ramius Group was right in many respects.
Go back to EX, a really simple device, due in 4 months from a sales conf announcement in the late 90s - after a very long wait....it staggered into life far too late.
Then there was the really sad chasing of the Holy Grail, Rio, ne SPGA [circa 1996]..an SRAM family.
The upgrade from Fusion to SmartFusion took practically 5 years, some find that a sad joke.
This is mostly about key customer/market match up, and the drive for profit. As far as I can tell the deal is self financing, not bad! What's interesting is the PR damage control already in action, see Dylan McGrath on EET, and trawl through this week's SEC filings from Actel if you want more.
I wouldn't be designing in Actel parts into consumer or commercial designs as of today, maybe in 12 months when the dust has settled.
You're right: I should clarify what I mean: Look at the margin per individual part: On caps this can be, say, 50% margin and much more. Compare this with the 3% for the main silicon part. (just an example). Now imagine how many caps and resistors and regulators there are around. Look where the *margin* goes. Vishay and National Semiconductors are doing very well (and for the latter: they deserve it, because I consider this as one as the best companies)
How can you say discretes are the "highest margin products in a device"? what is your criteria? Look at Vishay's, Murata, Avx etc and compare them to Intel, Linear Tech, Maxim. Your claim is non sensical!
Their CEO claimed had a college degree and when confronted with this lie continued to lie. The board did nothing but say Whoops He forgot. My guess is that he is running a semiconductor Ponzi scheme. Smells too much like a version of Tyco, Enron, or Bernie Madoff type of growth.
Maybe I see ghosts, but I see this has a more impact than anyone may expect. Actel recently has released a few VERY powerful devices, with ARM core integrated in them for the first time. In the cryptology area this is a very interesting FPGA family, due to the fact that they are really secure. For this specific market one can conclude that this must be *horrible* that ACTEL is beeing taken over with the message that 'competing devices' will be scrapped. See www.cryptomuseum.com for our spare time projects, here you see why I can make this opinion with 'some' background ;-)
BTW, transistors and diodes and other 'chicken food' are the most high margin products in any electronics device. Our managers (as stupid as they are) always look at the few big chips on the board, but not to the small stuff around them to let them work. These go into numbers! ;-)
@mark.lapedus: I too do not see "synergy" in the acquisition. But diversification may be a bigger driving force than synergy and it must have led to the maneuver, your story on board changes and power plays not withstanding.
Besides, there need not be 100% fit in product or technology offerings between the two companies for a merger. Diversification and future technology evolutions may be the driving forces for the merger. Perhaps the big cheese at Microsemi see possibilities in narrowing some Actel product lines and refocus the resources on some new products and/or technology?
Dr. MP Divakar
Here's what happened: In 2008, investment firm Ramius took a 6.6% stake in Actel. (http://www.eetimes.com/electronics-news/4079400/Rumor-mill-Actel-to-see-layoffs). Then, Ramius wanted Actel to divest its flash-based FPGA lines. (http://www.eetimes.com/electronics-news/4080068/Investor-to-Actel-Divest-flash-FPGAs). Actel blinked. Ramius was put on the board-and forced Actel's hand. That, in my opinion, was the beginning of the end. Actel was forced to sell. Enter Microsemi. There is no synergy. Only a match made in .... Do I have it wrong?
But as I noted in one of my blogs (http://bit.ly/claPNl) I really enjoy your video blogs -- I look forward to quaffing a few beers with you and Tony Burch if I ever manage to visit "Down Under"